Apple’s legal war over Qualcomm patents expands into China
Apple Inc. has taken its legal attack on Qualcomm Inc.’s patent licensing business global, filing two complaints in Chinese courts challenging the way the San Diego company gets paid for its cellular intellectual property.
The move comes after Apple sued Qualcomm last week in San Diego federal court over its patent licensing, among other things. It comes on the heels of the U.S. Federal Trade Commission taking legal action on similar issues three days earlier.
Qualcomm said it hasn’t seen the Chinese complaints but learned about them from a Beijing Intellectual Property Court news release, which says Apple is seeking $145 million in damages.
Apple did not respond to an email seeking comment Wednesday.
According to Qualcomm, one lawsuit alleges a violation of China’s anti-monopoly law and the other requests a determination of the terms of a patent license between Qualcomm and Apple over cellular standard essential patents.
In early 2015, Qualcomm paid a $975-million fine and lowered certain patent royalty rates for certain smartphones sold only in China as part of a settlement with China’s anti-monopoly regulator.
Qualcomm offered a patent license to Apple for Chinese sales with terms similar to those of the settlement. Apple declined to take the license, saying Qualcomm was still charging too much for key cellular patents.
“These filings by Apple’s Chinese subsidiary are just part of Apple’s efforts to find ways to pay less for Qualcomm’s technology,” Don Rosenberg, Qualcomm’s general counsel, said in a statement.
Apple contends Qualcomm is withholding nearly $1 billion in volume cap “rebates” to Apple in retaliation for Apple cooperating with South Korea’s antitrust probe of Qualcomm.
In December, South Korea’s antitrust regulator fined Qualcomm $865 million and called for changes in the way the company licenses patents.
Qualcomm has vowed to fight the legal and regulatory actions.
After financial markets closed Wednesday, Qualcomm posted mixed financial results for its fiscal first quarter.
For the quarter that ended Dec. 31, it reported revenue of $6 billion and net income of $700 million, or 46 cents a share, under Generally Accepted Accounting Principles. That compares with $5.8 billion in revenue and earnings of $1.5 billion, or 99 cents a share, for the same quarter last year.
Excluding the South Korea fine and other charges, Qualcomm earned $1.8 billion for the quarter, or $1.19 a share. That’s up from non-GAAP earnings of 97 cents a share a year earlier.
Analysts had expected revenue of $6.12 billion and non-GAAP earnings of $1.18 a share.
mike.freeman@sduniontribune.com
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